S. Davis, a graphic artist, opened a studio for her professional practice on August 1. The…

S. Davis, a graphic artist, opened a studio for her professional practice on August 1. The account headings are presented below. Transactions completed during the month follow.

S. Davis, a graphic artist, opened a studio for her professional practice on August 1. The account...

a. Davis deposited $20,000 in a bank account in the name of the business.

b. Bought office equipment on account from Starkey Equipment Company, $4,120.

c. Davis invested her personal photographic equipment, $5,370. (Increase the account Photo Equipment and increase the account S. Davis, Capital.)

d. Paid the rent for the month, $1,500, Ck. No. 1000 (Rent Expense).

e. Bought supplies for cash, $215, Ck. No. 1001.

f. Bought insurance for two years, $1,840, Ck. No. 1002.

g. Sold graphic services for cash, $3,616 (Professional Fees).

h. Paid the salary of the part-time assistant, $982, Ck. No. 1003 (Salary Expense).

i. Received and paid the bill for telephone service, $134, Ck. No. 1004 (Telephone Expense).

j. Paid cash for minor repairs to graphics equipment, $185, Ck. No. 1005 (Repair

Expense).

k. Sold graphic services for cash, $3,693 (Professional Fees).

l. Paid on account to Starkey Equipment Company, $650, Ck. No. 1006.

m. Davis withdrew cash for personal use, $1,800, Ck. No. 1007. Required

1. In the equation, write the owner’s name above the terms Capital and Drawing.

2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses.

3. Write the account totals from the left side of the equal sign and add them. Write the account totals from the right side of the equal sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, reanalyze each transaction.

 

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